Businesses look to future with gas drilling industry

August 9, 2012

STEUBENVILLE, Ohio - Having watched the oil and gas industry shape their own communities, business owners and government leaders from Western Pennsylvania were in Steubenville last month to share their insights into what lies ahead for Jefferson County.

The five-member Boomtown Panel, assembled by the Ohio Valley Oil & Gas Association to help its members understand the opportunities that oil and gas development brings, and what they'll have to do to benefit from it, convened as scheduled despite a power outage that forced organizers to use a generator for lighting.

Leading the storm-shortened, members-only discussion, held at Eastern Gateway Community College's Steubenville campus, were Paul Battista, president of Sunnyside Supply Inc. in Slovan, Pa.; Billy Kelly Sr., founder of BX3 Oilfield Supply in Wyoming County, Pa.; Eric Planey, vice president of International Business Attraction for the Youngstown/Warren Regional Chamber of Commerce and co-chair of the Cleveland-Pittsburgh TechBelt Initiative in Youngstown; Washington County, Pa., Commissioner Harland Shober Jr.; and Dearald W. Shuffstall II, senior vice president of Northwest Savings Bank's Oil, Gas & Mineral Division.

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Battista's advice, echoed by the other panelists, was to "tell them what you do and do what you say."

"Over perform, under promise," Shuffstall agreed. "The fastest way to never see another opportunity is to fail to perform the first time."

Shober said business owners "have to be flexible, have to be fast."

"First, you have to build a relationship with the companies in your area," Shober advised. "Once you have that relationship, then you have to think about your plan, how you can change - maybe adopt a new product line.

"The gas industry is going to have a different mindset than you're used to. Be flexible, don't be afraid to take a chance."

Doing business with the oil and gas industry requires deep-rooted commitment, Kelly said.

"There're places to make money, you've just got to be willing to look for them and work," Kelly said pointing out that while there's money to be made supplying goods and services to operations, "it's 24/7, folks, you've got to be willing to change your business model."

"What earns business is when you can go out of your way to do something for them," Battista added, relating how one company spotted his sign advertising used office furniture for sale. Another needed a building on short notice, and when he put a steel building together for them in just a few days, they ordered nine more. "That's how it is."

Planey said he fields calls constantly from people "who want to know how to contact" the drilling operators.

"I tell people to do their homework before they make any phone calls," he said. "If you sound uncertain, like you're opportunistic, you're not going to get it."

Battista said he tried to assimilate as much information as possible, researching online as well as by talking to people he knew worked in the industry, to prepare. That research taught him that the upstream side of the business is high risk, high reward for suppliers: While there's money to be made stocking big-ticket items the upstream side needs, "when (drilling activity) shifts to another area, another place, all the rigs move with it," he said.

"Choose where your risk factor is, where you feel comfortable," he advised.

Shuffstall told OVOGA members they'll need "a good lawyer, a good accountant and a good relationship with their banker" to do business with the oil and gas industry, while Kelly said it's important to figure out your focus, "then be good at it, be focused on it and do it very well."

Shober, meanwhile, told the group to start thinking about "what you're going to do 10 or 15 years from now" when the construction phase is over and the rigs have moved on.

"When everything goes away, when the wells are drilled and it's just production, what do you do then?" he asked. "Think about what you see, think ahead. Having a vision for the future is important."

"It used to be our young people were leaving to get jobs," Shuffstall added. "It's a different paradigm now. Now we have opportunity."